Xiaomi Starts Layoffs Amid Declining Consumer Spending
- Lawrence Ng
- Dec 22, 2022
- 2 min read
Chinese electronics giant Xiaomi Corp has commenced layoffs amid slow domestic sales.
A representative confirmed the news in a statement on Tuesday, saying the smartphone maker has implemented “routine personnel optimisation and organisational streamlining" with "less than 10% of the total workforce" affected, according to the South China Morning Post.
Chinese media outlet Jiemian, however, reported the move could slash about 15% of jobs, adding that the affected workers were given redundancy packages. Xiaomi reportedly cut jobs in several units of its smartphone and internet services businesses.
Xiaomi had 35,314 employees as of 30 September, 32,000 of which are based in mainland China. That number could soon be reduced, with thousands expected to be affected by the cuts, including the new recruits from the hiring spree which began in December last year.
Many of those affected took to Chinese social media platforms, such as Weibo, Xiaohongshu and Maimai, to voice their opinions about the cuts.
The Beijing-based Xiaomi held a 13% market share in China last quarter, making it the fifth-largest smartphone vendor in the country. It also saw its revenue decline by 9.7% year-on-year to 70.47 billion yuan (US$10.1 billion), while net profits dropped by 59.1% to 2.21 billion yuan during the same three-month period.
The decline is being attributed to China’s strict COVID-19 lockdowns and slower consumer spending. Retail sales in the country were also down 5.9% year-on-year in November, suggesting consumption weakness caused by a sluggish economy.
Xiaomi isn't the only tech giant that was forced to cut jobs this year. The Chinese social media giant Tencent cut 20% of jobs in March amid an economic downturn spurred by China's trade tensions with the U.S. Singapore tech conglomerate Sea also reduced its payroll in September in an effort to drive profitability back up.
Chinese electronics giant Xiaomi Corp has commenced layoffs amid slow domestic sales.
The smartphone maker said it has implemented “routine personnel optimisation and organisational streamlining" with "less than 10% of the total workforce" affected.
The move, however, could slash about 15% of jobs, with thousands expected to be sacked.
